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Jan 30, 2013 | 01:29

EU freezes Polish road funding over fraud

Jan. 30 - Warsaw calls the European Union decision to freeze about 890 million euros in aid earmarked for building Polish roads, ''completely incomprehensible'' because of a suspected fraud by contractors. Ciara Sutton reports.

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The European Union has frozen nearly 900 million euros in aid earmarked for building Polish roads, because of suspected fraud by contractors.
The Commission acted after the country launched a criminal investigation into an alleged price-fixing cartel involving companies bidding for road-building contracts.
Poland's Deputy Minister for Regional Development, Adam Zdzieblo, criticised the move.
(SOUNDBITE) (Polish) DEPUTY MINISTER FOR REGIONAL DEVELOPMENT, ADAM ZDZIEBLO, SAYING:
"The decision by the European Commission is completely incomprehensible and based on questionable assumptions. The Polish system of management, control and auditing of EU projects works very effectively, which is shown by the level of European funds used by Poland and the way they were put in place. That is why we strongly believe the Commission will back away from this decision."
The suspension comes at an awkward time for the Polish construction industry which is already dealing with a sharp economic slowdown and thousands of lay-offs.
A government official says they are committed to rooting out the suspected fraud.
(SOUNDBITE) (Polish) UNDERSECRETARY OF STATE FOR TRANSPORT MINISTRY, PATRYCJA WOLINSKA-BARTKIEWICZ, SAYING:
"We are in contact with the European Commission, with its representatives, in order to resolve the matter and unblock the frozen funds as soon as possible."
Poland is the biggest recipient of European Union funds, much of it spent on improving creaking infrastructure left over from Communist rule.
It has long been seen as a successful model for the use of EU development aid.
Eleven people have been charged, including construction firm executives and one former director at the state road agency.

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